Technology and Science · updated 1h ago · 2 min read
Blue Cross Blue Shield Association Links Hospital AI Coding To $942 Million Added Healthcare Costs
AI-driven hospital coding added about $942 million in healthcare costs over two years. Increase from complex-condition coding not matched by additional patient care.
Whether it is a war or one-sided bloodbath.
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TechBuzz and TechCrunch frame the issue as AI driving extra claims, but Abridge’s dystopia sits beside Chalker’s “not a war” rebuttal.
AI coding drives $942M
Hospitals’ use of artificial intelligence tools when submitting insurance claims led to an additional $942 million in healthcare costs over two years, according to an analysis by the Blue Cross Blue Shield Association. The analysis found a sharp increase in the number of patients whose records listed complex medical conditions, while it reported a “clear disconnect between medical coding and treatment,” with “no evidence of corresponding change in care provided.”
Luke Chalker, senior vice president at BCBSA, said the findings showed “no change in corresponding care for a more complex patient,” and he argued that reimbursement mechanisms allowed coding to change without care changing. The New York Times pointed the analysis as “just the latest sign that AI is contributing to rising health care costs,” while the BCBSA analysis focused on the link between hospital coding and spending.
Bots, disputes, and “blood bath”
Dr. Shiv Rao, founder of the AI startup Abridge, acknowledged that the cycle could lead to “a horrible dystopic future nobody wants to live in,” with “bots fighting bots, agents fighting agents.”
Rao also suggested that AI could reduce tensions and cut costs, even as the analysis described disputes between hospitals and insurers over treatments and payments as intensifying.
Luke Chalker resisted characterizing the situation as a battle, saying, “It’s not a war. It’s a completely one-sided blood bath,” with insurers on the losing side.
Abridge’s founder framed the risk as automated systems confronting one another, while the BCBSA analysis tied the cost increase to coding changes that did not match treatment changes.
Regulation and patient impact
Herberth Cuba, former Undersecretary of Health Benefits and Assurance at the Ministry of Health (Minsa), said Peru must strengthen regulation of AI in health services to prevent higher costs for patients and risks to the confidentiality of medical records. Cuba warned that in the United States, a study revealed that the use of AI in health services already increased care costs by $12,000 per patient, and he said insurers use another AI to audit diagnoses, leading to lawsuits.
Cuba said Peru has already launched AI health applications, including an AI audit model by SIS that uses machine learning to detect unusual practices and optimize the traceability of public spending, and he said these tools alter SIS’s relationship with hospitals. Cuba pointed to the Regulation of Law 31814, approved in September 2025, which states that certain high-risk AI systems in sectors such as health must have human supervision and provides mechanisms for transparency and oversight, and he insisted that “the first ethical principle must be the medical principle of not harming.”